1 week ago
ISMA Says India’s Sugar Prices Will Ease Soon
India’s sugar industry says the country has enough sugar for people to buy.
Sugar prices rose quickly in recent weeks, but ISMA says this was not caused by a real shortage.
Traders and large buyers stored extra sugar, which temporarily reduced the amount in normal circulation.
Festive-season demand, weather problems and lower sugar production also pushed prices higher.
Higher global sugar prices added to the pressure.
The government allowed 1 million tonnes of raw sugar to enter India without import duty.
It also limited how much sugar traders and bulk buyers can store.
Special crushing has started in Tamil Nadu and Karnataka, and the next season may begin earlier.
ISMA expects these steps to improve supplies and lower prices during the festive season.
ISMA said India has sufficient sugar stocks and no structural shortage.
Average retail sugar prices reached Rs 63.05 per kg on August 24, up 29% in a month.
ISMA attributed the increase to speculation, festive demand, weather effects and lower production.
The government allowed duty-free imports of 1 million tonnes of raw sugar and imposed stock limits.
ISMA expects prices to soften as imports, special crushing and an earlier new season add supply.
- Who
- The Indian Sugar and Bio-Energy Manufacturers Association (ISMA), including President Neeraj Shirgaokar, Director General Deepak Ballani and Vice President Madhav B. Shriram.
- What
- ISMA said India has adequate sugar supplies and that prices should ease after government measures.
- Where
- India, including the major producing states of Maharashtra and Uttar Pradesh, with special crushing underway in Tamil Nadu and Karnataka.
- When
- The statements were made on Monday, August 24; the current marketing season ends September 30 and the next begins in October.
- Why
- ISMA attributed the price rise to speculative stocking, festive demand, weather-related production reductions, lower output and tighter global supplies.
ISMA’s assessment
Government concerns
Cause of the price increase
ISMA’s assessment
ISMA said there was no artificial scarcity created by the industry and blamed speculative buying, bulk stockpiling, festive demand, weather effects, lower production and global supply tightening.
Government concerns
The government has blamed industry for increasing ex-mill prices and is examining whether some mills may be holding stocks.
Role of ethanol diversion
ISMA’s assessment
ISMA rejected the claim that ethanol production caused the price rise, saying diversion was within its historical range and that the sugar sector’s share of ethanol production had declined.
Government concerns
Concerns were raised that diverting sugar to ethanol could reduce domestic sugar availability and contribute to price pressure, although ISMA disputed this explanation.
Key facts
- Average retail price
- Rs 63.05 per kg on August 24, compared with Rs 48.73 per kg a month earlier.
- Maximum retail price
- Rs 75 per kg on August 24.
- Net production estimate
- Around 279 lakh tonnes in the 2025-26 marketing year after diversion to ethanol.
- Opening stock
- 50 lakh tonnes.
- Projected closing stock
- Roughly 35 lakh tonnes at the end of September.
- Annual domestic demand
- Estimated at 280-285 lakh tonnes.
- Government import measure
- Duty-free imports of 1 million tonnes of raw sugar were permitted.
- Trader stock limit
- The current limit is 400 tonnes; ISMA requested that it be reduced to 200 tonnes.
Quotes
Neeraj Shirgaokar
President of the Indian Sugar and Bio-energy Manufacturers Association
“Owing to the corrective measures taken by the government, sugar prices have eased over the past few days and are expected to soften further in the coming days, ensuring adequate supplies at affordable prices during the festive season”
theprint.in
“There is no shortage of sugar in India. Production and stocks are at satisfactory levels. The current situation is largely driven by market sentiment ahead of the festive season and does not represent a structural supply crisis.”
thehansindia.com
Sources
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